An agricultural superpower on the path to a specific feudalism

Аграрная сверхдержава на пути к удельному феодализму

For rural archaic Ukrainian native land, was the concept of a truly totemic. The country’s return to its roots due to the rapid elimination of the Soviet project of industrialisation was, in theory, to return the Ukrainian land the status of the main national treasures, surpassing the throne of the notorious transportation system. But events unfold in such a bizarre way that the agrarian superpower in danger of losing its main resource and means of production. And is prepared to do this voluntarily sell the land.

Historical myths about Ukrainians as brave knights, the Cossacks and at the same time highly spiritual singing sowers of buckwheat — are painful the test of modernity. Postmodern demanded that Ukraine extremely cheap labor, and those for export. Therefore, the priority of the democratic government of Kiev was to develop a new mythology capable of convincing ordinary people of the correctness of the reforms, their deep historical continuity and the consistent multi-millennial civilizational ideals of the Ukrainian nation. If simple words, it is necessary to explain balances of the local population, why the Ukrainian government is going to finally sell by auction all the property along with the “sacred” is still the ground. Well, to sell this same land. But to solve this problem change forever swollen faces Poroshenko on a cheerful face Zelensky may not be enough.

In the context of the land question really is especially resonant and sensitive, and therefore, it is advantageous for political speculation. No wonder the “new” authorities tried to launch a land reform directly to the wheels. And it’s possible see young talents just a little do not have enough experience and qualifications to blatantly vote in the “turbo mode” the necessary laws in the very first days of the new Parliament. And then, traditionally for Ukraine, the question stuck in the maze of interests, ambitions and “the list” a variety of shadow players that slowed down the process, but not stopped. And I must admit that since coming to power Zelensky run the land market is presented to the Ukrainians as the only perspective. Is only allowed to discuss the format of the reforms, which, however, still does not affect the final decision, which, as usual, is taken in a narrow circle, unknown to the Ukrainian public entities.

What is, to put it clear for the Ukrainian language, “the question price”? Populists reformers are trying to portray for the inhabitants of the virtual mountains of gold, which will fall on the heads of the Ukrainian peasants due to the invisible hand of the land market. Some “evaluators” in the Ukrainian air talking about the total value of Ukrainian farmland land 300 billion U.S. dollars and the possibility of attracting to buy tens of billion of units in foreign currency within three years. But these speakers for their words to answer to anyone don’t have to. Therefore, even representatives of the present Ukrainian government, despite its veneer of silliness and shameless, these fun figures are not voiced. And not out of modesty. Unlike every hyperloop and spaceports, land reforms carefully negotiated with the IMF. And foreign lenders to Ukrainian tales will not listen.

In fact, according to more realistic estimates, under arable land in Ukraine is used 32,5 million hectares, which corresponds to the ninth place in the world. The total area of Ukrainian farmland is 41.5 million ha, which is 31.1 million hectares are in private ownership (27,7 was in mutual form), and 10.4 million hectares in the state.

It should also be noted that the “gray” trade land in “small doses” is conducted in Ukraine all this time and is subject to moratorium on sale. The volume of this semi-legal market makes up to 1% of the total land area. And during 2016-2019, the average price of a hectare unit of land in Ukraine amounted to 37 393 UAH/ha, or about 1.4 thousand dollars. USA.

Thus, if we leave aside difficult to predict the topic of redistribution of ownership of private owners, Ukraine as a state may, according to preliminary and very rough estimates, gain from the sale of 10 million hectares of available land about 15 billion U.S. dollars. If you sell all government stocks at the current average price of $ 1,500 per hectare, to implement such a project in one year does not work. “Fun”, anyway, have to stretch that definitely will grease the PR effect of the operation.

Another thing is that even this amount (approximately 40% of the annual budget) is absolutely not a saving for the Ukrainian economy. And to pull that kind of deal will be possible only once, in the end, left without land, without money, which will be commonplace pass, and partly, as always, stolen.

Moreover, the queue of those wishing to quickly and more expensive to buy Ukrainian land on the horizon is not visible. Optimists speak of a gradual increase in the price of hectares of Ukrainian land to 2.5–4 and even up to 6 thousand dollars. USA after market open. Pessimists, in turn, noted that the small Ukrainian owners are not prepared to pay over $ 500 for the purchase of a hectare of land. Large land holdings, kernel, UkrLandFarming, MHP is also not going to invest additional billions of dollars in those allotments that they rent today.

In any case, the Ukrainians should remember about “Brazilian version of” when after the opening of the land market within five years she was in the hands of a dozen “landlords”. And her former owners spent the money, become the inhabitants of the poorest areas. “If the land market will open in the next year, the main buyers will be the Ukrainian agricultural holdings. With buy will be very cheap. In the range from 200 to 700 dollars per hectare. And that’s if they even have a conscience and some moral principles. And if not, then the ground would be just stupid to steal and rewrite for a bribe notaries in the state register. In other words, it will be a great robbery of smallholders,” predicts one of the Ukrainian experts.

Based on this situation, Western donors rather important to achieve a fundamental solution to the issue with opening Ukrainian land market. That is to say, the creation of a “window of opportunity” for future operations in this area, which will depend on current profitability, and other opportunistic moments, including a gradual weakening and “dispossession” of the Ukrainian oligarchs.

Playing into the hands of Western friends, the real jewel of the Kiev authorities, the Minister of economic development, trade and agriculture Timofey Milovanov argues that the IMF supposedly anyway, as it will work the land market in Ukraine. According to him, the Fund is not Ukraine indicates what needs to be done in the issue of land reform, however, he is interested in rural business development for small and medium sized farmers to improve the welfare of people in Ukraine.

However, Milovanov himself repeatedly and in plain text urged not to trust him. A lover of dance, denunciations and sailing, neither in Ukraine nor in the economy, according to him, not understands and calmly accepts the title of “idiot” and “moron”. Apparently, therefore, he was to lead the development of the local economy, to their lowly and deliberately paradoxical arguments about everything and anything to distract the attention of the masses from the real processes of plundering the remnants of the Ukrainian resources. And it is not surprising that Milovanov a few months earlier announced a 35 (!) variants of land reform, allegedly developed jointly by Ukrainian and foreign experts. True or not, doesn’t matter as to the relevant Committee for consideration in the end got about a dozen bills. And 18 October was approved one, namely No. 2178-10.

What lies behind the aforementioned numbers? “The launch of the land market is scheduled for October 1, 2020, the priority right to purchase will provide the current tenants, in one hand you can’t buy more than 15% of the land in one area and 0.5% of the national land and more. However, it added another limitation — not more than 35% of the land of the United territorial community, but it is, in fact, has no special significance”, — said economist Alexei Kusch.

It is important that the President Zelensky publicly promised to grant a priority right for the purchase of land to citizens of Ukraine and foreigners was supposed to get the opportunity in 2024. “The question of land market is very sensitive and requires broad and public discussion. I want to dispel a few myths. First, to dispel all the myths and all the manipulations that have sown in the minds of citizens over the last twenty years. Second, to find optimal and balanced solution to the open land market. First and foremost: the land belongs to the Ukrainians. In the model, which we offer, to buy or sell land can only Ukrainian citizens and Ukrainian companies. Horror stories about Chinese, Arabs or aliens who will take out our land carriages, is nonsense,” — said the President.

However, the enacted bill limits won’t touch the companies with foreign capital, which is more than three years working on the Ukrainian market and controlled approximately 3.5 million hectares of the land Fund. Experts also note that foreign agents, nothing prevents to create specifically for the purchase of land shell Ukrainian companies and their subsequent redemption after 2024. So all flags will come to Ukraine invited to the section of the land market almost immediately. Another thing is that large multinational players rush this, it makes little sense, given the further degradation of the Ukrainian economy and its public institutions.

Thus, it is possible to assert confidently enough that the opening of the land market is not a priority, but a fundamental challenge for Ukraine’s foreign players. This raises a reasonable question: whether will master the power Zelensky this global challenge “invisible hand of the market” or simply will break it’s teeth, as often happens in the Ukrainian Makhnovshchina?

Most likely, the “servants of the people” nothing will prevent to execute the solution at the legislative level. In the end, the parliamentary majority is still kept on an irrational the popularity Zelensky and his political brand. Since the land fully meets the liberal attitudes of the Ukrainian “reformers” and strongly supported by their Western “friends”, tough resistance in Parliament, the reform is likely you will not meet.

However, this does not mean that the land map in future will try to play against Zelensky in the case of aggravation of contradictions between the shadow equity holders of Ukrainian politics. In this case, opponents of the government will speak not those who are strongly opposed to the fact of the land trade, and those who will see in her actions, even totally unrelated to agriculture, a threat to their selfish interests. And “wet” Zelensky land issues in Ukrainian conditions would be advantageous for all his opponents.

However, the Ukrainian President has repeatedly stated its readiness in the case of things without much straining to leave his post. However, if the Ukrainian politicians say that they don’t hold their seats, it should be understood that for the sake of office they are willing to commit any crime. Zelensky personal role in the implementation of the sale of the Ukraine, most likely, not so tragic, to risk life or freedom. As talented an actor he is supposed to represent a “human face” of the Ukrainian anti-social reforms, speaking on such a “anesthesiologist” in the minds of the people. Oddly enough, while he is doing quite well. Although what is there to wonder if the Ukrainians seriously hope to build an agricultural Empire on a global scale by transferring land funds in “safe” foreign hands.

Wojciech Michalski

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